tv Press Here NBC June 28, 2015 9:00am-9:31am PDT
♪ mountainview has said no to google's massive expansion plans. so why not move the whole thing to san jose? just one of our questions for sam lecard oh mayor of san jose. and intel promises millions to companies run by women or minorities but is that good business? intel capital's lisa lambert. our reporters from "fortune" and bloomberg. this week on "press here."
good afternoon, i'm scott mcgrew. we usually have ceos, i introduce them with a bit about their company and balance sheet. my first guest is not a ceo. then i thought, what if he were? how would i introduce him? he has 984,000 customers. he's head of an organization with revenue of nearly $3 billion, but no profits. a company employing more than 5,000 people working on everything from aviation to security to dogcatching. sam lecardo is mayor of san jose. the 10th largest city in the united states, and the self-proclaimed capital of silicon valley. he's a graduate of georgetown and harvard and a former prosecutor. joined by mark million of bloomberg and mikhail levram of
"fortune." i didn't grow up -- i spent a great deal of my life in the south bay. there is this feeling sometimes of the little brother status of the south bay. i'd like to point out to anyone who doesn't known it that san jose's the largest of the three, oakland, san francisco and san jose are. we still the capital of silicon valley though? >> you know i'm not sure scott, that we ever order the capital. i think we are the urban center of silicon valley -- >> does it still say capital of silicon valley on the side of garbage trucks? >> i didn't make it up -- >> will it still say it on the side of garbage trucks? you might change it? >> i might. look silicon valley is in 30 places at once. i think we can be the vibrant center of silicon valley. that's what i aspire to make this city. i think we've got a lot to brag about, but we've also got a lot
of work to do. i'm not eager to start throwing out monikers like capital because i'm not sure they're applied. >> what's your pitch to young people moving north? i mean you've got one here. are you -- >> yeah. >> still. >> a ton of -- i -- >> that's where young people want to live now. >> yeah. it's not now. i mean i moved to san francisco in 1997 right. this is what young people did for many many years. if anything the trend is probably slowing mostly because there's no room and people are tired of paying $4,000 a month for a studio. >> i see highrises showing up the valley and the mission. >> yes, and you'll keep paying $4,000 a month. san francisco's a wonderful city and will continue to be a wonderful city. i think what we're creating now in downtown in particular is unique. you see a lot of highrise construction happening there. >> by this you mean snoej. >> yeah. san jose forgive me. what we're seeing is a real revitalization there in the core a lot of people moving in whole foods just opened.
we've had 40 tech companies move in in the last year and a half. enormous amount of growth. i think we're going to get there. >> why do they chose san jose, or do they tell you? i'm not saying why do they choose san jose, but they looked at palo alto oakland, san francisco, and chose san jose why? >> right. and that's downtown. now over 120 tech companies in the downtown core alone. the reason why is because the town has always been here. as we look at the data believe it or not, contrary to popular myth, over half of the college educated people between 25 and 40, live in san jose. that's reality. we talk to google where where their work force lives. 18% or 19% north of san francisco. 15% south of the campus in mountainview. that tells us that this myth that all the talent is to the
north is largely that. there's a lot of talented people in san francisco. it's a wonderful place, but this continue to be a place that drives innovation. we're exceeding growth rates that san francisco had last year, we'll ton do that. >> a lot of the sexier startups are setting up shop in san francisco. is that a problem for you at all? >> no. i think that's perfectly fine. the truth is the startup culture never sprouted in san jose as it did in places around stanford, for example, or sandhill or now san francisco. we're a place where companies tend to go to scale. that's perfectly fine. we're also developing interesting startups as well. the fact that startups or standard social media companies like zynga will choose san francisco, that's fine. we have companies that make things, that's not a bad thing to do these days manufacturing.
people actually still do that. in fact, it's growing quickly in san jose. those are also companies that make profits. >> i'm feeling defensive about the south bay. i point out, well, we have google and apple and facebook. you know you may have heard of them. >> or more boring companies. >> cisco. >> samsung is opening its north american headquarters there investing $1 billion in that. >> how did you get them, xr frchl -- for example? that's a big facility. >> they are. we committed to them we'd get them through the process quickly. we wouldn't be hitting them up for new fees or community benefit or anything. nay simplethey simply open shop and we'll meet their need. they want to open and not have cities getting in the way. cities up and down the peninsula are telling companies we're not going to open we're not going to allow you to expand and not
move at your speed. >> mountainview being one saying to google no, you cannot build all the mega glass-domed city of the future that you want to. is that something where you swoop in and say, you know, you could build it in san jose? or is that not done? you don't swoop in on mountainview? >> there's a lot of swooping going on. swooping is permitted and often encouraged. the reality is look, community like mountain view are wonderful communities. they have challenges with scale. >> right. san jose doesn't. so let's build the google mega-polis in san jose. >> right. the point is this gets back to the opportunity to be the vibrant urban center of silicon valley. we are the place that can scale. we have 10 nollmillion to 11 million square feet of office space. all that is being built out. not all is in spec. a lot of it is going to be occupied by large tech companies. many of the big name are certainly swirling around san jose as well.
>> so working with all of these businesses and sort of emphasizing technology industry build-out and, you know welcoming the whole foods and all of this this sort of affluencies, how do you sort of maintain a diverse culture? >> that's a huge challenge in the bay area. rent is challenging all around. recently we had the supreme court approve an ordinance that i had been pushing from the time i got into office and city council eight years ago. the first -- one of the first things i did inclusionary housing ordinance that requires builders to build more affordable units or pay a few in lieu of that. we passed an impact fee on develop force create enough revenue to help build more affordable unit. we're also trying to encourage and force developers to build a lot of density. >> you won that court case. now you can force a builder to
create affordable units which he or she could have sold at a higher rate but has to sell at an affordable rate? is that a fair -- >> typically the way it works, they don't tend to build the units. they pay a fee. we use money to partner with a nonprofit builder. >> with the average -- sorry, the median house price in san jose at $900,000 a $700,000 home would be more affordable. >> true. >> you can't win this in that sense, right? let's bring it down to just half a million. half a million become your low-end home. maybe you can't build affordable housing in san jose. >> well you know there are larger forces more powerful forces than city hall. it's called the market. we recognize that supply and demand is going to drive this ultimately. in terms of what i try to do, in terms of driving affordable housing, first, it's around the form and location of the housing. we know about 30% of silicon valley households' income is being spent on transportation
now. >> 30%? >> typically between 20% and 30%. >> wow. >> a lot of money's going into that car. if we can get corridors and bart's under construction, bus, light rail under construction now, these modes are critical to be able to make silicon valley more affordable and, of course building higher densities. >> mayor liccardo with a couple second left, i want to ask the one question that i've been cures curious about mayor autos -- how good are you at "sim city"? >> hopefully i'll be a better mayor than i am at "sim city." >> no ufos that come in and destroy -- >> if they do, we're turning to you. san jose mayor sam liccardo thanks for being with us. next intel doubles down on its promise to promote women in technology. we'll take a look.
welcome back. there's talk in silicon valley about leveling the playing field, giving women and minority the chance they deserve. there's talk and then there is action. action is much more rare. >> we are thrilled that we're doing this. this sun precedented. $125 million invest fund. where have you seen that? intel is bringing that to the
market. >> that was the announcement from intel recently. an announcement that company's venture capital arm would create a fund to invest in women-led and minority-led startups like britain, co online craft and style site. one of four initial judgment by intel with more to -- initial investments by intel with more to come, over the next five years. the person in charge of that fund is lisa lambert, vice president of intel capital. she's a former software engineer and graduate of harvard business school, as well. i want to say when we get this started, i'm going to ask you some questions that are very much devil's advocate. i think what you're doing is wonderful. that said i'm going to ask hard questions that make it sound like i don't support it. >> you don't want hate mail? >> thank you for summing it up very well. that is to start with if people put together companies that make money and return money on
investment, just invested in them. who cares who's running them? >> i agree. i agree. if it works that way, then we would need no diversity fund. we absolutely would not require it. unfortunately, it doesn't work that way. there's something in our industry called pattern recognition. there is a pattern for identifying quality investment companies. and unfortunately, as part of that pattern the make-up of the person. you know venture capital is a relationship-oriented business. we tend to recruit out of our networks. and we -- the entrepreneurs and investors. and our networks tend to look like us. and if 96% of the investment profession are asian and caucasian males, then most likely you'll invest in that, as well. >> let me ask the counter to that. that is, if there are businesses out there that venture capital is not recognizing, that have great returns, why are you telling everybody about it? don't tell anybody about it and
invest in it. >> we think it's the right thing to do. this is an initiative for us. we expect to make money. research suggests that when women lead companies, you get better return. >> i agree. that's why i'm saying don't tell anybody that. >> there's enough to go around. >> there is enough. 3% of women ceos get venture funding. there's a lot of room. and you know women lead 40% of the private businesses in america. tech companies only 8%. silicon valley, it's only worse. 3% of women ceos leading tech companies. you got to figure that somewhere we've got to have a balance here. have -- half the world's population are women. you know 30% of america's population are african-american and native american and hispanic american. they need to be in the game. >> you guys are -- you've set aside this money, you know obviously for female-led ventures and minority-led ventures, as well? is that right?
>> correct. >> obviously you invest -- intel capital more broadly invests in all companies. now we're seeing quite a few women-led venture capital and angel investment firms sprouting up and only investing in women. do you think that's the right approach? they're not breaking into top-tier vc firms. if that say, it doesn't solve that problem. >> it doesn't solve the diversity problem of the investor group. that does need to be solved. again, you recruit and invest out of your networks. so if the nors are homogenous asian or causecasian males you expect that. we need to break into the private venture firm. i think it's good that more women are starting their own funds. female entrepreneurs are going to feel more comfortable, have more empathy regarding the markets they're pursuing. women and minority entrepreneurs aren't part of the status quo. they're focussed on underserved
markets. and you need people that are empathetic to that. investors that are minority or women are going to get. it the story will rhett night with them. >> the earlier pattern recognition, pattern matching, it's a very real thing within the venture capital world. how you sort of taking ethnicity and gender out of the equation and leaving all of the other factors, and why can't anybody else do that? >> the why is a mystery to me. again, it goes back to the fact that we do what we feel comfortable with. we think we can do it one, because we diversified our team. i've got three women, i've got three african-americans three asian americans on my investment staff focusing on these deals. by definition we're diverse and credible in the communities where the companies are. we know how to find them. >> lisa, could i cheat the system? could i create the board that had what you wanted to see, and in that sense, is it cheating at
all? because after all, you accomplished what you wanted. >> yes. >> well, a board that i want to see -- >> my point is if i were to make sure that there were a founder and executive that met the criteria to get intel's money based on the criteria you've set out, in that way i'm gaming the system. on the other hand i've gained it in a way that benefits what you wanted to accomplish in the first place. >> yeah, yeah. game away right? i mean do more of that. i wish they would do that. it's out of their comfort zone. and you know those companies when they come to them have difficulty, they have -- they can get meetings they can't get closure on investment. we need to be here. my goal would be to be out of this business in five years. we've said $125 million over the next five years. my expectation would be we're going to invest in great companies. we announced four of them. those companies will be successful, have great outcomes. they'll start companies, right,
and there will be more of them. hopefully with all of the proof points the venture capital and entrepreneur community the take note and adapt. adjust their practices. they're missing out. you know 35% better returns when a woman ceo is leading a tech company. 35%. 12% more revenue according to -- >> you argue that those women because they're their are so few, they're the best of the best that manage to break through. and so when you're investing just in women, you're self-selecting to an extent that you have this pool and maybe some of them are not the best. also playing devil's advocate -- i should say -- >> mark also fully supported -- >> save myself from -- well done. >> we'll give out their e-mail addresses at the end. >> our job. >> certainly there's going to be some that rise to the top. again, we're look at this objectively. these companies follow the exact same process of any investment. they're not getting special treatment. we're looking at the best companies with the best leadership teams. they have to pass the muster.
>> they don't get special treatment, but they get in to begin with at least special recognition. then once they're in your fund, you're expecting the same thing out of them. >> that's right. >> and this realistically means that if i am less experienced at doing this, as some women or minority-led companies might be that means intel's going to come in and say, listen we need to clean this up a bit. the big people are going to come in on the board and say we need to make change in this company. >> absolutely. >> as they do with everyone. >> as they do with everyone. we communicate that clearly up front. we'll treat you like a professional organization, and if you run yourself successfully, you scale and you do the right thing you'll continue to get our support. we would give that message to anybody. the good news is that there are so many qualified companies. when we started looking at this we got to 100 prosnext almost no
time@ at all. the issue that is a pipeline issue is not true it is a funding issue. lots of great ideas from entrepreneurs, not a lot of capital access. that's a problem we're trying to solve. >> do you think that given everything that happened with the ellen powell trial which everybody's probably familiar with at this point -- >> sure -- >> -- was that good or bad for venture capital in the valley? >> i think a lot of people thought there would be backlash on women entrepreneurs in particular. i think we've found that's not been the case. vcs are beginning to adapt behavior. the venture capital association is a person that's cheering an effort around diversity. we hear a lot about vcs looking proactively for female and minority entrepreneurs. some have hired diverse people on their investment team. i think ultimately they've won the case but ultimately the market won the battle. >> >> i have a minute left intel
said, we're going to spend $300 million to balance out intel so it matches. what happened in the culture there that this is now what intel is chasing? i praise it. and every company says they're doing it. you guys are doing it and it's part of the culture. >> you have a female president for starters. >> that helps. we have diverse leadership. i think ultimately the markets we serve are diverse. you know i mentioned half the world's population -- >> so is every other company. >> true. >> and you're -- you're an old-school chip company, too. you're not even -- forgive me -- a cutting edge sort of company. you are an old-school manufacturing company. yet, you have this new culture. >> we're developing technology for -- wearables, right. wearable are largely jewelry. so if we have only men designing products, how are they going to serve -- >> a watch -- >> exactly right. your daughter won't want to buy
one. i won't, mikhal won't want to buy one. we need representation that looks like the population buying our product. yeah. did you notice, i didn't mention you. >> lisa lambert, vice president of intel capital. we wish you the best of luck. we think it's a marvelous thing despite us giving you a hard time. >> my pleasure.
welcome back to "press here." mark milian is one of our new reporters, "bloomberg business week." you were telling me the latest issue has one article in it? >> it's one esay 38,000 words, like a small book. >> right. >> it's devoted to code. the entire issue is one essay devoted to the important of software -- >> an html actually right? >> yeah. you need to bring your program or i.t. department in to read it. >> who wrote it? >> it's written by a contributor named paul ford. he is a journalist and a programmer which is a rare breed in our profession. >> it is indeed. >> and he essentially took you know all this information about code and like what is code what are the principles of code, what's the history of code why is it important to business and distilled it into one novela-length article. that became the basis for our issue. >> the hopes that that will get people's attention. that this is one magazine with
nothing in it but. >> it's definitely attention-grabber. but it's also important because code is -- is everywhere now. it's like there no excuse to not really understand what this is and how it works. i mean, it's in our cars it makes our cars run, it's in our thermostats. it's -- businesses across the world need to know -- >> not just codes companies. >> and you have 38,000 words in "fortune" magazine? >> not 38,000. 12,000-word piece, also get ready to sit down for a few hours. it's a fascinating inside look into the sony hack. one of the most high-profile hacks over the last few years really. >> and "fortune" is selling stories we haven't heard before. that's old news, right? that was months ago. >> our writer is fabulous. he took six months to report this. i mean tens and tens of hundreds of interviews. and -- >> north -- >> yes, yes. yeah. he went out there also.
>> snuck in. >> not that. but yeah. highway he got an inside look into what led up to the hack. this is also like with the code story. you know, it's something all companies -- you definitely don't need to be a tech company to appreciate some of the risks that are out there today even if you think you're protected. you're not. >> it was so instructive with sony how o'hare f.y.ing ing-- how horrifying it was that stuff that got out. >> devastating. not just the movie. you look at everything that was leaked. >> right. >> and thousands of employees whose identities were out there. >> the latest version -- latest issue -- listen to me, a software guy -- latest version of "fortune," latest issue of "bloomberg business week" as well.
an trujillo: hello and welcome to "comunidad del valle." i'm damian trujillo and today we're honoring our veterans on the show, plus another feria de salud on "your comunidad del valle." male announcer: nbc bay area presents, "comunidad del valle" with damian trujillo. damian: we begin today with an effort to make job sites more family-friendly. with me on "comunidad del valle" is the chair of the commission on the status of women of santa clara county, lupe rodriguez. welcome to the show. lupe rodriguez: thank you for having me. damian: talk about the effort here. what are we trying to accomplish? and, how are you--how is the commission and other agencies trying to reward employers who kind of have a family-friendly atmosphere? lupe: right, well, so the award that we're talking about today is called, "the family-friendly workplace award. and, as you mentioned, it was sort of thought of the commission on the status of women and the office of women's